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Monthly Archives: April 2013

The cloud-storage arms race heated up even more on Monday when Microsoft gave its OneDrive for Business service a big capacity boost.

The per-user storage provided by OneDrive for Business is rising from 25 gigabytes to 1 terabyte. That applies to both the standalone version of the product and the versions that come bundled with Office 365.

The standalone version of OneDrive for Business is available as a $5-per-month option with the free Office Online Web-based productivity suite. Microsoft is currently offering the first year’s subscription at half the price. That promotional offer is available through September.

Microsoft also announced that for the first time, it is including OneDrive for Business with Office 365 ProPlus, a full-featured version of the desktop Office suite that is sold via an annual subscription for $12 per user, per month. These subscribers will also get 1 terabyte of storage per user.

OneDrive for Business, previously called SkyDrive Pro, is a service where employees can store, share and sync personal work files.

OneDrive for Business is included with most editions of Office 365, the cloud email and collaboration suite that includes online versions of Exchange, Lync and SharePoint, and with the standalone SharePoint Online service.

These Office 365 editions vary in price depending on their features and components. For example, Office 365 Small Business costs $5 per user, per month, while Office 365 Enterprise E4 goes for $22 per user, per month, to mention just two of the bundles.

The enterprise file sync and share market is crowded with specialty vendors such as Box, Dropbox, Accellion, Watchdox and Egnyte, and with products from larger providers such as Google, IBM, Citrix and EMC.

This type of storage product has become an essential component of modern collaboration systems designed to allow colleagues to jointly edit documents and access files from a variety of devices, including smartphones, tablets and PCs, via different methods including native mobile apps and standard Web browsers.
Dropbox charges $15 per user, per month for an unlimited amount of storage as part of its Business plan.

Meanwhile, Box charges $15 per user, per month for 1 terabyte of storage in its Business plan, and $35 per user, per month for unlimited storage.

Google Apps for Business, which costs $5 per user, per month, includes 30 gigabytes of Gmail and Drive storage. Customers can purchase more storage in various increments, including 1 terabyte for $89 per user, per month.

As part of its free Google account for individual consumers, Google offers each person 15 gigabytes of standard storage for Gmail, Drive and Google+ Photos, 100 gigabytes for $1.99 per month and 1 terabyte for $9.99 per month. Google chopped down those prices from $4.99 and $49.99, respectively, in March.

Arvind Kumar, 30, a loom operator at Optimum Silk Mills, a small powerloom unit turning polyester thread into cloth in Bhiwandi near Mumbai, is nervous as we talk in a wooden cabin adjoining the factory’s noisy shop floor. A resident of Gaya, Bihar, Kumar reached Bhiwandi three years ago after spending two years doing odd jobs in Tarapur, a nearby town. The 12-hour workday in the loom, which also entails being exposed to deafening noise, earns him around Rs.8,000 a month, barely enough for the father of two. “I try to be happy with what I get,” says Kumar, feigning a smile, and wiping grease stains off his hands. “This is the work that I know best.”

A worker takes a nap in front of yarn-spinning equipment at a factory in Coimbatore.Kumar is one among 1.5 million workers in the Bhiwandi powerloom sector, which makes 33 per cent of India’s polyester fabrics used in shirts, saris and suitings. Most of them are migrants from Uttar Pradesh, Bihar, West Bengal and Odisha, earn daily wages of Rs.250 on average, have no savings account and are uninsured. They take frequent holidays from work to visit their home states, and in certain months there is a 25 per cent shortage of labour in the looms, shutting them down partially. Some of the workers do not return, as new opportunities come up in their home states.

Losing competitiveness

But labour scarcity and poor working conditions are just two of the several ills dogging the Indian textile and apparel sector, which directly employs 35 million, contributes 4 per cent to India’s GDP, and earns 17 per cent of the country’s exports. “The Indian textile industry is losing competitiveness,” says Rahul Mehta, president of the Mumbai-based Clothing Manufacturers Association of India (CMAI), which has 20,000 apparel-making firms as members. The decline in the sector started in the 1980s with the closure of integrated or composite textile mills in erstwhile hubs like Mumbai and has now reached an alarming stage. In April-September 2012, India’s textile exports declined 5.9 per cent year-on-year to $14.1 billion due to a slowdown in major markets like the US and Europe. India lost its No. 2 position in global apparel exports to Bangladesh in 2011-12.
China, Bangladesh and Vietnam have emerged as the biggest threats to India in the global market. “No one can beat China, whose mass production units ensure products 60-70 per cent cheaper than India’s,” says B. Basu, coordinator of Sasmira Powerloom Service Centre, a unit under the Union textiles ministry which helps train workers in new technologies and soft skills. Modern jet looms in China can churn out up to 10,000 metres of cloth a day, compared to 40 metres at a Dobby loom in Bhiwandi.

“Although China is becoming expensive in terms of wages, its overall capacities and efficiencies will ensure that buyers cannot move out of the Chinese supply chain,” says Mehta. The rise of Bangladesh in this segment has been startling too. “Bangladesh exports to the European Union (EU) at zero duty, compared to 10 per cent for India,” says A. Shaktivel, chairman of Apparel Exports Promotion Council (aepc) and president of Tirupur Exporters Association. “The cost of production in Bangladesh is just half of that in India.” Bangladesh exports 55 per cent of its textile products to the EU, 43 per cent to the US and 2 per cent to India.

Surging production costs

The rising cost of production, from raw material to labour and transportation, is a key factor that has hurt India’s competitiveness. Cotton yarn prices, for instance, are up 20 per cent to Rs.236 a kg (for 40s combed, a variety of yarn) as on March 1 this year from Rs.198 in June 2011. The case of raw cotton is no different. “Domestic cotton prices are 3-5 per cent higher than international prices in spite of India having surplus cotton overall,” says Manikam Ramaswami, chairman of Cotton Textiles Export Promotion Council, a Mumbai-based government-sponsored body formed to boost exports. “There is an artificial scarcity created by procurement agencies holding over two million bales of cotton procured during November- December 2012 and January 2013.” Government procurement agencies such as the Cotton Corporation of India and nafed buy cotton from the market to support cotton farmers against price vagaries. But in this case, Ramaswami says, it is proving counterproductive. “Private traders are also holding large inventories,” he adds.

Meanwhile, labour costs, although low compared to other industries, have doubled in the past 10 years. Wary powerloom owners, who turn cotton and synthetic yarn to fabric, for instance, have to effect frequent wage revisions to retain experienced workers. Gajendra Pratap Singh, 30, a technician in a powerloom, started 10 years ago as a helper, but today earns Rs.18,000 a month compared to barely Rs.3,000 then. Singh, who hails from Allahabad, is a hard worker and an exception, says his employer Manoj Shah. “Such workers need to be better paid so that they stick.”

In the garment sector, which adheres to wages declared by the Government, salaries have been going up periodically. “Labour costs rise 10-15 per cent every year in line with inflation,” says J. Suresh, managing director and ceo of Arvind Lifestyle Brands Ltd, which has 12 of its own and 15 international apparel brands under its portfolio.

Domestic apparel demand fell 20 per cent due to lower consumer spending over the last two years. “Since the beginning of 2012, high inflation and slowing spends have dampened demand,” says Suresh. Poor infrastructure and taxes are concerns too. “Indian companies are bogged down by too many direct and indirect taxes,” says K.K. Maheshwari, managing director of Aditya Birla Group flagship company Grasim Industries, which derives 80 per cent of its business from viscose staple fibre, a raw material for textiles. Rising logistical costs remain a dampener. Transport costs have gone up by as much as 40 per cent in five years. “What takes five days to transport in China will take a month in India,” says B. Basu.

PC’s Budget quick fix

In the latest Union Budget, Finance Minister P. Chidambaram tried to address some of the issues, including a technology upgrade fund scheme for the sector, setting up of apparel parks within textile parks, and providing working capital and term loans at 6 per cent interest. He proposed to continue with the Technology Upgradation Fund Scheme (TUFS), a state-funded plan to help textile mills use better technology, in the 12th Plan, with a focus on the powerloom sector and an investment of Rs.1.5 lakh crore.

Another Rs.500 crore has been allocated to set up processing units. Also proposed were Rs.2,400 crore to modernise the powerloom sector andRs.50 crore to incentivise apparel parks. The Government also removed excise duty on cotton textiles at the fibre, yarn, fabric and garment stages. “The removal of 10 per cent excise duty could lead to a 5-7 per cent drop in garment prices,” says Arvind Lifestyle Brands’ Suresh.

The finance minister also announced sops for the traditional handloom sector, including working capital and term loans at a concessional interest rate of 6 per cent. “The handloom sector is in distress. A very large proportion of handloom weavers are women and belong mainly to the backward classes,” Chidambaram had said.

What’s needed at ground zero

“The garment industry is seasonal, and the compulsion to employ full-time labour for the whole year and the virtual impossibility of closing down factories adds to the pressure on margins and makes the viability of a project that much more difficult,” says CMAI’s Mehta. The industry is demanding flexible labour laws to engage contract labour freely and increase overtime limits.

There is an urgent need to modernise machinery at Indian units in the wake of labour scarcity and rising wages, says Grasim’s Maheshwari. Apparel makers are betting on a free trade agreement (FTA) between India and the European Union, which would be a “win-win” for both. “Under the FTA, Indian apparel makers can import fabric not produced in India, and send it back to Europe with value additions,” says Shaktivel. “Value additions can be up to 55 per cent. That will also help boost employment,” he says.

But the skill gap needs to be plugged. “The Government has identified a huge skill gap and launched the Integrated Skill Development Scheme,” says G.R. Andhorikar, dean of Textile Education at Sasmira. “In five years, there is a need to upgrade four-five million people.” Imparting better skills and improving working conditions of those like Arvind Kumar will be critical for the sector to attract talent.

“Both the industry and the Government need to take a hard look at the ground reality,” says Grasim’s Maheshwari. “If not, we will soon turn into a mere textile-consuming nation from a manufacturing one.”